CONSISTENTLY
DELIVERING
®
INTEGRATED ANNUAL REPORT
2022
CONTENTS
Performance for the year | 1 | About this report | 2 | |||
OUR BUSINESS | Business overview | 4 | Incoming Chairman's report | 12 | ||
1 | ||||||
Value creation through the use of capitals | 6 | CEO's report | 13 | |||
Stakeholders | 8 | CFO's report | 16 | |||
Outgoing Chairman's report | 10 | |||||
BUSINESS STRATEGY | Share performance | 22 | Group strategy, material issues and key risks | 23 | ||
2 | ||||||
PERFORMANCE | Five-year review | 29 | Operational reviews | 30 | ||
3 | ||||||
GOVERNANCE | Corporate governance | 33 | Risk management | 37 | ||
4 | ||||||
STRUCTURES | Directorate | 34 | Assurance | 39 | ||
Board and Executive Committee structure | 36 |
Afrimat's full suite of reports can be accessed from the links below:
Integrated report 2022
Notice of Annual General Meeting 2022
Commodities resource register
King IV application register
GOVERNANCE
5 OVERVIEW
Social, Ethics & Sustainability | 54 | ||
Committee report | 42 | 57 | |
45 | Mineral Resources Register | 64 | |
46 | Remuneration report | 68 | |
Managing climate change | 48 | Technology and systems | 74 |
51 |
Afrimat is committed to applying ESG principles to create value for stakeholders
ANNUAL FINANCIAL
6 STATEMENTS
Directors' responsibility statement | 76 | Statements of Financial Position | 87 |
Declaration by the Company Secretary | 76 | Statements of Changes in Equity | 88 |
Audit & Risk Committee report | 77 | Statements of Cash Flows | 89 |
Independent auditor's report | 79 | Notes to the Annual Financial Statements | 90 |
Directors' report | 84 | Analysis of shareholders | 144 |
Statements of Profit or Loss and Other | |||
Comprehensive Income | 86 |
E S
SHAREHOLDER | Notice of AGM | 146 | Shareholders' diary | 156 | ||
7 | ||||||
INFORMATION | Form of proxy | 153 | Contact details | 156 | ||
Definitions | 155 |
The following Sustainable Development Goals ('SDGs') are addressed in this report
G
Navigation toolkit
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PERFORMANCE FOR THE YEAR
FINANCIAL PERFORMANCE
Balance sheet | Net debt:equity | Operating profit | Return on | |||
net operating | ||||||
remains strong | ratio 12,1% | margin 23,7% | ||||
assets 33,0% | ||||||
SAFETY IS OUR TOP PRIORITY
No fatalities for TEN consecutive years
LTIFR of 0,58
(Please refer to page 51 for safety initiatives)
Operating profit margin 23,7%
14,7 | 15,9 | 18,2 | 24,0 | 28,7 | 23,7 |
'18 | '19 | '20 | '21 | '21* | '22 |
HEPS | ||||
542,9 cents | ||||
CAGR 31,7% | ||||
180,7 | 234,1 | 347,7 | 441,7 | 542,9 |
'18 | '19 | '20 | '21 | '22 |
Total dividends per share
(cents) 186 cents
CAGR 31,6% | ||||
186 | ||||
81 | 117 | 148 | ||
62 | ||||
'18 | '19 | '20 | '21 | '22 |
Since 2009, Afrimat's share price rose 3 293% and over the past five years it is up 129% - during the time when most other companies felt the pain of an economic deterioration.
Afrimat is hedged against economic volatility through wide
ADVANCING SUSTAINABILITY
Afrimat is committed to Environmental, Social and Corporate Governance ('ESG') matters
and regards sustainability as a mandatory strategic objective.
VALUE CREATION IN COMMUNITIES
Consolidated Broad-Based Black Economic
NAV per share | |||||
2 170 cents | |||||
CAGR 24,9% | |||||
893 | 1 030 | 1 246 | 1 635 | 1 761 | 2 170 |
'18 | '19 | '20 | '21 | '21* | '22 |
Net cash from operating activities 951 655 (R'000)
CAGR 47,5% | ||||
200 960 | 484 | 676 810 | 767 580 | 951 655** |
410 |
'18 '19 '20 '21 '22
Share price at year-end
6 650 cents
CAGR 23,1% | |||
6 650 | |||
899 | 925 | 850 | 4 430 |
2 | 2 | 2 |
'18 '19 '20 '21 '22
diversification, which generates a balanced and consistent income stream.
Afrimat has a superb track record of acquiring, assimilating and then growing businesses.
During the year Afrimat finalised the acquisition of
Empowerment status attained at a level 3 (level 3 in 2021)
Skills and socio-economic development spend R38,0 million (2021: R28,5 million)
Preferential procurement B-BBEE score of 63,4% (2021: 76,2%) as verified by South African National Accreditation System ('SANAS') Accredited B-BBEE Rating Agency
* Measurement period adjustment - during the current year, the comparative information for February 2021 was retrospectively adjusted in the process of finalising the accounting for the business combination (Refer note 12.1).
** Includes the acquisition of stockpiles of Glenover's Sales of Asset Agreement.
Coza Mining Proprietary Limited.
Certain subsidiary companies achieved a B-BBEE status of level 2
1 | AFRIMAT integrated annual report 2022 | |
ABOUT THIS REPORT
Afrimat is a leading black empowered group with its main business and core competence in mid-tier mining.
The Group supplies industrial minerals and construction materials to a range of industries across southern Africa.
It further supplies bulk commodities to local and international markets.
It is listed in the 'Construction & Materials' sector of the JSE Main Board since 2006.
Corporate information
The Group's executive directors are Andries J van Heerden (CEO), Pieter GS de Wit (CFO), Collin Ramukhubathi and Marthinus G (Gerhard) Odendaal. They can be contacted at the registered office of the Company. The Company Secretary is Catharine Burger. See contact details on the inside back cover of this integrated annual report.
The integrated annual report 2022 is available in hard copy, on request, from the Company Secretary and is also published on the Group's website www.afrimat.co.za.
Our integrated annual report 2022 contains information aimed at all our stakeholders with a specific focus on our shareholders. We are committed to providing shareholders with reliable, accurate, balanced and transparent
reporting. Overall, the report is intended to give our stakeholders a better understanding of the material issues, risks and opportunities that we face in terms of business sustainability, value creation and growth over the short-term (less than 12 months), medium-term (one to three years) and long-term (beyond three years).
Scope and reporting parameters
This integrated annual report 2022 covers the financial performance and non-financial performance of the Group. Afrimat reports on the strategy, the six capitals on which it relies and the opportunities, risks and outcomes attributable to or associated with its key stakeholders, who significantly influence Afrimat's ability to create value for the year ended 28 February 2022. There has been no material change in the scope and boundary of the IAR compared to the prior year or to historical financial data.
For more information, see the annual financial statements on pages 76 to 143.
Frameworks applied
In compiling this report, Afrimat considered the legislative requirements for reporting and the International Integrated Reporting Framework, issued in January 2021. Our report conforms to the requirements of local and international integrated reporting frameworks, the South African Companies Act 2008, JSE Listings Requirements and the Mining Charter. We continue to use the GRI guidelines for our sustainable development reporting. The Company applies the majority of the principles in the King IV™ Report. An explanation and summary for each principle is provided and published on the Group's websitewww.afrimat.co.za. This is to allow stakeholders to make an informed decision as to whether Afrimat is achieving the four good governance outcomes required by King IV™.
Materiality
The legitimate interests of all our key stakeholders were taken into account in determining information that is considered to be material for inclusion in this report. Afrimat defines strategic matters as those which are most material to the formulation and execution of strategy and those that have the potential to significantly affect Afrimat's ability to create stakeholder value and contribute to the future sustainability of the Group.
Risk management
Risk is inherent in all Afrimat's business activities. We are committed to identify, assess and prioritise risks in order to minimise, monitor and control
the probability and impact of unfortunate events to support the achievement of our objectives.
Refer to page 37 for the risk management report.
Forward-looking disclaimer
This integrated annual report 2022 contains forward-looking statements that, unless otherwise indicated, reflect the Company's expectations as at 28 February 2022. Actual results may differ materially from the Company's expectations if known and unknown risks or uncertainties affect the business, or if estimates or assumptions realise differently. The Company cannot guarantee that any forward-looking statement will materialise and, accordingly, readers are cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any intention and assumes no obligation to update or revise any forward-looking statement even if new information becomes available as a result of future events or for any other reason.
Board responsibility statement
The Board, assisted by the Audit and Risk and Social and Ethics Committees, acknowledges its responsibility for ensuring the integrity of the integrated annual report, and has applied its collective mind in the preparation thereof. The Board believes that the report has, in all material respects, been presented in accordance with the IIRC's Framework. The Afrimat Board approved this integrated report and authorised its release on 24 June 2022.Combined assurance
A combined assurance model is used to provide Afrimat with assurance obtained from management, internal and external assurance providers. PricewaterhouseCoopers Inc. are the auditors of Afrimat and provided an unmodified opinion after auditing our consolidated annual financial statements 2022. The extracts from the annual financial statements in this integrated annual report are from audited information but not audited.
The Group's financial, operating, compliance and risk management controls are assessed by the Group's internal audit function, which is overseen by the Audit, Risk and Compliance Committee.
Matie von Wielligh | Andries van Heerden |
Chairman | CEO |
24 June 2022 |
2 | AFRIMAT integrated annual report 2022 | |
CONSTRUCTION
MATERIALS
Hard rock and gravel quarries and sand mines
Afrimat owns and operates 30 commercial quarries and sand mines strategically located throughout South Africa.
All quarries are mined and developed with precision while taking into consideration both geology and fluctuating market demand for product types.
Readymix Concrete
Successful implementation of vertical integration is a key contributor to value creation within Afrimat, and nearly
20% of all aggregates produced are consumed internally through either Afrimat-owned readymix concrete operations or precast manufacturing facilities.
Afrimat owns 26 commercial readymix concrete plants in both metropolitan and rural areas.
Contributing to social and economic development, readymix concrete trucks are mostly owned by owner-drivers or sub-contractors.
Clinker
Established in 1989, Clinker Supplies is one of the largest clinker ash processors in South Africa and reclaims approximately 1,5 million tonnes of discarded boiler ash product from power generating facilities into clean sellable
aggregates annually.
When the reclaiming process is complete, the site is rehabilitated as per the approved environmental management plan and recreated or restored to its natural state.
Manufactured concrete products
Afrimat owns 11 precast facilities.
While consuming more than half a million tonnes of Afrimat produced raw materials, these facilities manufacture approximately 250 million concrete bricks, blocks, and pavers annually, and are strategically positioned to provide a cost-effective solution to the affordable housing shortage in South Africa.
1
OUR BUSINESS
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Afrimat Limited published this content on 24 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 June 2022 14:35:01 UTC.